Ecosystem business models: The new roadmap or a detour?

Illustration of coworkers standing in a circle

While plenty of articles about the new business ecosystem have focused on creating digital systems for products or platforms, the ecosystem concept can be applied to any number of industries where relying on partnerships is the norm.

As consultants, our goal is to deliver and evolve experiences in the marketplace. However, Rangle has never been about simply creating the technology and applications our clients need, then handing them over with little communication. Our model is to work directly with our clients’ product teams, helping them grow and learn, in order to upgrade their skills so that they are prepared to maintain and evolve any technology that we may build together—long after our engagement is over.

We embrace the idea of true partnership: Being a part of our client’s core operations, as much as any other function in their organization. This requires a deep level of trust, and so we often begin as service providers to our clients, and evolve into business and strategic partners once we’ve proven our worth. This commitment to doing more and being more underpins our approach to every client project, and has allowed us to be part of launching some truly groundbreaking products to the market.

The way Rangle works, however unique it may be today, is critical to the success of organizations in the future. It’s impossible for many organizations to hire the kind of talent they need to support their goals for growth in every area of their business. Even if there were unlimited potential employees with the right skills waiting to be hired, most organizations don’t have the resources to bring all the skills they need in-house. Simple outsourcing doesn’t solve this problem from a strategic point of view: You can “offshore” as many critical pieces of your business as you like, but do you trust these service providers to act for you and make the best decisions for your company?

Moreover, with the right partnerships, you can hire specialists who solve your problem exactly the way you need it solved. They partner into your business, and their single focus makes more business value than an internal team with competing priorities could. We believe that in the future, companies who don't partner with experts will be at a cost and competitive disadvantage, since they will pay more for less output. With specialists who have the permission to think and act strategically for your business, you will get a competitive advantage that can't be duplicated internally.

Finding the right partners who understand your company’s goals and strategy is key. There is  a freedom in being able to trust your partners absolutely—to know that their goal is to help you accomplish your goals. Most companies rely on a large network of service providers, covering their tools and enabling technologies, resourcing, payroll, and more. While some may be more plug-and-play than others, it’s important to identify those service providers (or those needs) with a potential to elevate your business and your capabilities in a future-focused, strategic way. An ecosystem of true partners working under a one-team model is an insurance policy: You get a whole network of partners who are dedicated to your product and digital business outcomes.

Consider the case of department stores: Their product is their shopping experience. They sell products from other businesses (and may sell some products under their own brand, but these are commissioned and created on their behalf by other companies) and their value as businesses comes from having a wide selection of products all available in the same place. What was a novelty in 1900 now has to be augmented with a whole range of services to keep department stores relevant when it’s as easy for customers to buy directly from a brand rather than a reseller (as the case of Nike demonstrates).

It’s impossible for department stores to bring all the employees they need to satisfy their business goals in-house. They have to be giants in both ecommerce and bricks and mortar retail, create dining experiences that echo their brand in restaurants and cafes housed in their flagship stores, plus offer a suite of services like salons, concierge, alterations and repairs, personal shopping and more.

To keep all these arms of a department store business reflecting their brand standards, partnerships can’t be merely transactional. Especially now, when the retail industry is suffering, these companies need fresh injections of strategic planning and foresight to stay afloat. A traditional vendor can’t help you reinvigorate your business. A true partner, on the other hand, is working to co-create your five year plan, because a win for you is a win for them.

Consider this example: Before Salesforce became the powerhouse that it is today, many companies had built similar solutions in-house that were difficult to scale and full of dependencies. When SaaS was a new concept, there was hesitation to trust an outside service with such a critical piece of business software. However, no company that needs a SaaS solution like Salesforce today would dream of attempting to build a similar product from scratch. The sheer number of SaaS partners in this space that can provide their service so well and so cheaply would make any company trying to build the same level of capability in-house look ridiculous.

Today, we’re all very comfortable relying on these SaaS partners for our most important software. We think that, in the business world of tomorrow, we will also be comfortable with finding partnerships that can change our business model, as the market itself changes. If businesses don’t solve for the evolution of scaling ecosystems, they will get left behind by competitors.

Don’t forget that as an ecosystem business, your success lies not just in your product, but in your strategy. Orchestrating a cohesive strategy for all your partners is the key goal. In the past, some companies have attempted to partner with all different organizations for strategy, design, and development. However, this scattered approach fails spectacularly. When these partners are siloed from each other, the lack of a pure customer focus and one-team model makes your business slow and unfocused. When these partners deliver solutions after 18 months of planning, they are painfully out-of-date in the digital economy, or just plain wrong for your customer.

Many potential clients we meet with are skeptical of partnerships, because they’ve been burned before by high price tag agencies that don’t deliver on their promises, or vague promises about responsiveness that never materialize. Finding the right, customer-centric partner boils down to this: One team, one mission, one business model.

Would you like to know more about Rangle’s partnership model? Visit the Our Partnership Model page.

Tags

See what Ranglers are writing about on our blog